Money. You need it to live, but whether you're a spendthrift or a miser, money can make you do foolish things. You'll waste it trying too hard to save, spend it on things you don't need, and simply overpay on regular expenses every month. Here's how to avoid being stupid with your hard-earned cash.

Stupid Thing #1: You Spend More by Trying Too Hard to Save

Frugality has its downfalls. When you try too hard to save, sometimes you end up wasting your money in the process. This may seem almost impossible, but it happens when you try so hard to cut costs that you stop paying for things you actually need. Doing this leads to more problems down the road—problems that are far more costly.

Money's tight these days, and as a result, you make an effort to save it. Make sure you…
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For example, skipping regular checkups at the doctor and the dentist can save you a few hundred dollars each year, but there will come a day when your lack of preventative care—which is very important—will earn you a much higher bill.

Doing your own taxes with inexpensive software may also seem like a good idea, but if the software makes any mistakes you could end up paying for them later. If you're going to do your own taxes, make sure you have the time and resources necessary or you could run into problems.

Dear Lifehacker, Now that tax forms are starting to flood my mailbox, I'm trying to figure out …
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Buying cheaply made products is another way to throw away your money. It may save you cash in the short term, but you're bound to find yourself replacing it far sooner than a well-made product. If you've ever purchased a cheap inkjet printer, you know this works. It'll print well for about six months to a year before you start to run into clogged ink heads and other issues. While the printer may be under warranty, manufacturers will often just replace them because it's less expensive than the cost of repair. This is not only bad for the environment, but it can be bad for your wallet if you end up paying any of the costs yourself. It's always better to look for a good deal on a well-made product than sacrifice quality manufacturing for the sake of a discount that will possibly cost you more in the long run.

Buying in bulk can also cost you more in the long run if you don't use everything you buy. Bulk food can be great for multi-person households—especially those with children—but buying in bulk isn't necessarily ideal for just one or sometimes even two people. Before you make your way to CostCo or Sam's Club, ensure that you're going to actually use everything you buy and that you're actually getting a good deal—because sometimes you're not.

Buying in bulk from warehouse clubs like Costco, BJ's, and Sam's Club, can net you…
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Overall, if you think your purchasing decisions through before you make them you shouldn't have too hard of a time realizing when your efforts to cut costs will actually hurt you in the long run. A little thought is enough to solve the problem.

Stupid Thing #2: You Don't Put Money in Savings Because You Think You Can't Afford It

When you aren't bringing in as much as you'd like with each paycheck, it's hard to reduce that amount by cutting out a chunk that's just going to sit in a bank account and earn minimal interest. In some cases, you may think you can't even afford to save. Neither option looks particularly attractive, but there are numerous benefits to saving even a small portion of your paycheck that you may not realize—benefits that save you even more money in the long run.

While this probably goes without saying, saving money means you have a reserve of cash at your disposal. It's worth mentioning nonetheless because you may not realize that you can end up spending more money in the long run when you don't save at all. This not happens because you can quickly rack up credit card debt by buying things you can't afford, but because using your savings to purchase an item means you have the freedom to spend at the most optimal time—such as when a good deal comes along. If you don't have the necessary savings when that deal arises, you'll have to put it on a credit card that you can't pay off immediately and the interest will quickly negate those savings. If you have cash at the ready, you won't face this dilemma.

You can save money even if you don't have a lot of cash reserves—just start small. If it hurts to take a chunk out of your paycheck each month, consider saving a dollar or two every day. Because you likely spend at least that much cash on a daily basis, funneling it into a jar won't seem quite as difficult as watching about $30-60 disappear each month from your paycheck. Contributing in small amounts will grow your savings slowly, but as you get in the habit you may feel more comfortable increasing the amount. If you're really having trouble finding the money to put in your savings account, consider where you can cut back and use the leftover cash to sock away each month. In the next section will discuss reducing your bills, which is an excellent way to find an explicit amount of extra cash each month, but you can also cut back in other ways if necessary. Cooking at home is one of the biggest savers. If you cut out prepared food and coffee runs on most days, you can save a lot. Buying generic—which sometimes gets you an identical product for less—is a great way to save money further. You can also save a lot by reducing your electricity usage, which can often be as simple as remembering to turn things off and using more efficient light bulbs. You'll also want to consider what you actually have to buy and what you can reuse. Razor blades, for example, can be used for a couple of years with a simple sharpening technique. Consider what can be kept before you toss it in the garbage.

If you do any amount of shaving, we don't have to tell you that razor blades are expensive.…
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Contributing to your 401k is another great way to save, but many people avoid this because 1) retirement seems a long way off and 2) they want to build an emergency fund beforehand so they're ready in case of a problem. There are two issues with avoiding a 401k. First, if your company matches any contribution you make you're basically throwing away money by not taking advantage of that benefit. Second, your 401k can also serve as an emergency fund. In many cases—such the an inability to pay rent or a medical emergency—you can withdraw money from your 401k early with either a reduced tax penalty or none at all. You will be subject to the income tax, but you'd have paid that if you put it in a savings account anyhow. Not every 401k allows for hardship withdrawals, so be sure to check with your plan (or any plan you're considering) beforehand. If you are covered, there's really no excuse to contribute to your 401k right now.

Stupid Thing #3: You Overpay on Bills (and a Lot of Other Stuff)

When you see a price tag on an item you want or receive a monthly bill in the mail, the general assumption is that this price is not negotiable—but that's where you'd be wrong. You can end up easily overpaying by quite a bit if you just accept the price you see. Often times there is a less-costly alternative.

When it comes to your bills, there are two things you can do to lower them. The first simply involves making a few phone calls each year to negotiate your rates. If you pay your bills on time and you've been loyal to the company for the last year or more, it's not hard to get some sort of discount. I do this twice a year with my cable bill and end up with a discount, a free upgrade, or both. In addition to your cable (or internet) bill, you can target cellphone carriers, credit cards, car insurance, and gym memberships. All you have to do is ask what they can do to help you get a lower price and be persistent.

This past weekend I called up my cable internet provider and received a discount of $15 off my…
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In the event you can't get a cost reduction by simply asking, you can make some small sacrifices. In general, many monthly services include something you do not need and can easily live without. For example, text messaging plans can be replaced with Google Voice. Cable packages likely include a few premium channels you bought as a bundle but don't need anymore, and a super-thin HD antenna (like the Mohu Leaf) could replace your cable package altogether and even save you some space. Switching to a lesser bundle may not only be cheaper, but lock you into another discount for six to 12 months. You just have to look at what you're currently paying for and think about what you really need. Most often, you can live with less than you think because there are free alternatives available.

Cutting the cable and switching to streaming video doesn't mean you have to miss out on the…
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As for in-store prices, people tend to think they can't haggle when they often can. Big ticket items like furniture, appliances, and mattresses are rarely set in stone and you can make a deal if you try. This even works at big-ticket retailers like Best Buy. You can negotiate prices on televisions, for example, and often get a lower price and/or free accessories (like those overpriced cables). Cars and home prices are also commonly negotiable, and you can even reduce your medical bills with a simple question. Insurance companies are often ending up with lower rates, so if you're paying your doctor or dentist out of pocket you should see if they offer a cash discount. I get 10% off every dentist appointment for paying with a check. While you don't want to haggle for absolutely everything you buy, when the cost is higher than average it never hurts to ask. You may not get a discount, but if you do that quick negotiation will prove worthwhile.

Whether I'm buying something used or paying for a service, I'm never sure when it's…
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Stupid Thing #4: You Carry Credit Card Debt

We're lucky enough to live in a world with plenty of great products and so it's easy to turn to a credit card to buy them when you don't have the cash. Just because racking up unnecessary credit card debt is common these days doesn't make it a healthy practice. Carrying debt that you take time to pay off can amount in huge interest charges that don't take long to get into the range of thousands of dollars even if you always make your minimum payments. There's rarely a good excuse to carry debt on your cards, so if you do you it's time to put together a plan to stop right now.

When you get a few credit cards and see a bunch of things you want, it's easy to rack up a…
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To eliminate the debt, you need to make a plan. Figure out how much you can pay every month and how long paying that amount will take you to become debt free. ReadyForZero is a web app that can help you put that plan together. Once you have your plan, all you have to do is follow it. Debt can seem insurmountable at times because it can take years to pay off, but if you're patient and persistent it will be worth it in the end.

ReadyForZero is a webapp that analyzes your financial situation, takes a little input from you, and …
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Stupid Thing #5: You Don't Check Your Credit Report

Checking your credit report is incredibly important and yet many people neglect to do it even though it's free. Not only is it important to know if there are any negative ratings on your account, but it can help you catch identity theft early on. The Consumerist posted about a man named Mike who found an anomaly in his credit report and it helped him that turned out to be fraud:

You get a free credit report every year, but that may not be enough. If your identity is stolen, a…
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I check my free credit report every year. Well apparently last year I didn't check my Experian report, which was good news for me this year because I still have until May for my other two. Well, lo and behold, there's a default filing for $163. At first I was like, oh I forgot to pay something, what the hell cost me $163 that I missed?

The $163 was a fraudulent charge that Mike wouldn't have known about for a long time had he neglected to check his report every year. Ideally, you'd want to check quarterly to stay on top of any potential issues but you'd have to be willing to pay in that case. If you want a free report, we recommend using AnnualCreditReport. Not all free credit report services are actually free, but we know that one is. In addition to keeping an eye on fraud, you can use your report to improve your credit score. For the most part, paying your bills on time, avoiding collections, and only applying for new cards or loans a couple of times per year should keep your score on the rise. That said, you may find something on your credit report that shouldn't be there, so be sure to call the major three reporting agencies (Equifax, Experian, and TransUnion) to have it removed if you do.